JERUSALEM (Reuters) - Israel on Tuesday named a new ambassador to Turkey, the foreign ministry said, the latest step towards normalizing diplomatic ties between the once strong Mediterranean allies following a breakdown in 2010.

Israeli Foreign Ministry spokesman Emanuel Nahshon said Eitan Na'eh, currently deputy ambassador in London, had been appointed ambassador in Ankara. It was not immediately announced when he would take up his post.

Turkey was also expected to name its envoy to Israel shortly.

Israel and Turkey said in June they would normalize relations - a rapprochement driven by the prospect of lucrative Mediterranean gas deals as well as mutual fears over security risks in the Middle East.

Both countries have recently increased cooperation in the energy sector.

Israeli-Turkish relations broke down in 2010 when 10 Turkish pro-Palestinian activists were killed by Israeli commandos enforcing a naval blockade of the Gaza Strip. The soldiers had raided a ship, the Mavi Marmara, leading a flotilla to the Hamas Islamist-run Palestinian territory.

Israel has agreed to pay compensation to the families of those killed on the vessel, a crucial element in the restoration of ties.